Thursday, May 31, 2012

If we want to lessen income disparity, the solution is easy: restore the minimum wage to levels considered reasonable 43 years ago in 1969.

There is much hand-wringing about the vast income disparity in the U.S. between the top 5% and the bottom 25%, and precious little offered as a solution.Once again we are told the problem is "complex" and thus by inference, insoluble.

Actually, it's easily addressed with one simple act: restore the minimum wage to its 1969 level, and adjust it for the inflation that has been officially under-reported. If you go to the Bureau of Labor Statistics Inflation Calculator and plug in $1.60 (the minimum wage in 1969 when I started working summers in high school) and select the year 1969, you find that in 2012 dollars the minimum wage should be $10 per hour if it were to match the rate considered "reasonable" 43 years ago, when the nation was significantly less wealthy and much less productive.

The current Federal minimum wage is $7.25, though states can raise it at their discretion. State rates runs from $7.25 to $8.25, with Washington state the one outlier at $9.04/hour.

In 40 years of unparalleled wealth and income creation, the U.S. minimum wage has declined by roughly a third in real terms. "Official" measures of inflation have been gamed and massaged for decades to artificially lower the rate, for a variety of reasons: to mask the destructiveness to purchasing power of Federal Reserve policy, to lower the annual cost-of-living increases to Social Security recipients, and to generally make inept politicians look more competent than reality would allow.

The full extent of this gaming is open to debate, but let's assume inflation has been under-reported by about 1% per year for the past two decades. That would suggest the minimum wage should be adjusted upward by about 20%, from $10 to $12/hour.

All those claiming such an increase will destroy the nation (or equivalent hyperbole) need to explain how the nation survived the prosperous 1960s paying the equivalent of $10-$12/hour in minimum wage. Exactly what has weakened the economy such that the lowest paid workers must bear the brunt of wage cuts?

There are about 140 million jobs in the U.S., including part-time and temporary, and roughly 40 million workers earn less than $10,000 a year. This is the vast population earning minimum wage, and their earnings constitute a small share of total income.

The bottom 90% have seen their wages stagnate for 40 years, but the bottom layer earning minimum wage have seen their real earnings decline by roughly one-third (not counting entitlements they might qualify for as members of the "working poor.")

In the good old days of more widely distributed incomes, the bottom 20% who generally earn minimum wage actually saw significant increases in income. That has reversed in the financialization era.

Those earning minimum wage hold a tiny sliver of the nation's wealth.

Apologists for low wages claim we must "get competitive" with low-wage nations, as global wage arbitrage has cut wages everywhere. This claim overlooks the fact that the vast majority of minimum-wage positions are precisely the jobs that cannot be outsourced: cleaning offices, fast-food jobs, pizza delivery, agricultural work, and so on.

Other apologists claim that since these positions are "low productivity," they "deserve" lower wages. If we as a nation reckoned them worthy of $10-$12/hour 40 years ago, then why are low-productivity jobs less deserving now?

Still other apologists claim that raising the minimum wage would 1) destroy small businesses and 2) trigger painful increases in food and other prices.

The only way the minimum wage can hurt small business is if some small businesses are allowed to cheat and pay illegally low wages as a way of lowering the cost of their service. If the law were uniformly and aggressively enforced, for "black market" and above-market wages alike, then those cheating their employees would slowly be eliminated from the economy via heavy fines.

Once everyone is paying $10-$12/hour, even for informal work, the "playing field" will be leveled at a higher scale.

Given the modest share of the national income earned by low-paid workers, claims that costs would skyrocket are groundless. Yes, costs would rise, but not by enough to impoverish the nation.

What all those decrying restoration of a reasonable minimum wage overlook is that the working poor will spend most of their increased wages, and that will actually aid the economy where it counts. Aren't we tired yet of Federal Reserve policies that enable more skimming by the top 1% while giving nothing to the bottom 50%? The simple, straightforward way to correct the vast income imbalances is to restore the minimum wage to 1969 levels and adjust for under-reported inflation.

What about the wealthy? Shouldn't they pay more than the rest of us? Well, actually, they already do, for the most part: the top 25% of taxpayers--34 million workers out of a workforce of 140 million--pay almost 90% of all Federal income taxes. But we'll address that aspect of income disparity tomorrow.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

Wednesday, May 30, 2012

Our choice is simple: either continue on the State-cartel path of complexity and rising costs that leads to a death spiral, or re-energize the forces of the market and community.

We are constantly told all our problems are too complex to be addressed with simple "big idea" solutions.Complex problems require complex solutions, we are assured, and so the "solutions" conjured by the Central State/Cartel Status Quo are so convoluted and complex (for example, the 2,319-page Dodd-Frank Wall Street Reform and Consumer Protection Act or the 2,074-page Obamacare bill) that legislators say they must "pass the bill to see what's in it." (What If We're Beyond Mere Policy Tweaks? February 6, 2012)

The real "solution" is to see that complexity itself is the roadblock to radical reformation of failed systems. Complexity is the subterfuge the Status Quo uses to erect simulacra "reforms" while further consolidating their power behind the artificial moat of complexity.

Over the next three days, I will present three "big idea" solutions that cut through the self-serving thicket of complexity. Nature is complex, but it operates according to a set of relatively simple rules. The interactions can be complex but the guiding principles can be, and indeed, must be, simple.

Big Idea One: Radically lower the cost basis of the entire U.S. economy. The cost basis of any activity is self-evident: what are the total costs of the production of a good or service? The surplus produced is the net profit which can be spent on consumption or invested in productive assets (or squandered in mal-investments).

We can understand surplus by way of simple examples. If it costs two barrels of oil to extract one barrel of oil from a well, there is no surplus at all to this activity; rather, it is a losing proposition. If it costs $100 to plow, plant, nurture and harvest $50 of crops, there is no surplus generated by this economic activity.

Anyone pursuing these kinds of zero-surplus activity will soon go broke and be eliminated from the financial "gene pool" of investors.

Central States and cartels by definition face no market forces on their cost basis.Central States (governments) have no competition and so there are no market pressures to contain costs. As a result, governments are intrinsically incapable of radically reducing the cost basis of their activity.

Cartels (the sickcare industry, the defense industry, etc.) by definition profit by fixing prices, not by adapting to competition, and so rising costs are simply shifted to consumers, with the aid of an over-regulating, moat-building "complex" Central State.

Unproductive layers of activity are essentially friction within the economy ( How Much of Our Economy Is Essentially Friction? September 20, 2011), and as with a machine, when the friction consumes all the surplus, the machine freezes up. Greece is an excellent example of this dynamic.

As I explain in Resistance, Revolution, Liberation, there are three fundamental forces in society: the State, the market and community (i.e. the non-market social order).

As friction from the State and its crony-capitalist partners, the various cartels, inevitably rises, the surplus left to distribute via entitlements or invest shrinks.

The State has two mechanisms to counter this decline in surplus: it raises taxes on the productive enterprises and people, and redistributes that money to less productive dependents of the State via entitlements. Secondly, it prints money and redistributes the new cash.

Both are short-term expediencies that inevitably lead to collapse. Once taxes skim the economy's surplus for consumption, there is not enough left over to invest in productive assets that increase productivity. This triggers a death-spiral (positive feedback loop): as productivity stagnates, so does the surplus generated by economic activity. This leads to lower tax revenues, so the State raises taxes on the remaining productive elements, further bleeding the economy of funds that could be invested in future productivity gains.

Printing money debases the purchasing power of the existing currency, and over time this destroys the value of the currency and the wealth of those holding the currency. As people retreat to gold and land, the liquid capital necessary to invest in new ventures dries up, adding to the death-spiral described above.

In essence, the State and its cartels raise the cost basis of getting by from $10,000 to $40,000 by letting unproductive friction absorb all the economy's surplus. Layers of bureaucracy, paperwork and outright fraud consume roughly half of the funds spent on healthcare in the U.S.--not coincidentally, this aligns with the fact that the U.S. spends twice as much per person on sickcare compared to our developed-world competititors.(The "Impossible" Healthcare Solution: Go Back to Cash July 29, 2009)

The State overcomes this by raising taxes on the productive and printing money.The State's "solution" isn't to reduce its own fiefdoms' spending or dismantle the high-friction cartels: it's to tax or print $30,000 and send this money to those making $10,000, so they can consume as much as those earning $40,000.

As noted above, consuming the nation's surplus in consumption and friction starves the nation of market-driven productive investment, which then leads to the death spirals of lower productivity and rising unproductive friction.

The only way to lower the actual cost basis of the economy is to reduce the role and power of the Central State, dismantle its favored cartels and re-empower community and the market forces of innovation and competition. The Central State and its cartels are incapable of innovation or reducing costs because they dominate the market and the community.

Community must play a central role in lowering the cost basis. The market cannot address all problems, though its ideological boosters wear blinders that demand allegiance to nothing but the market.

Community gardens are non-market social orders that enliven and empower communities and neighborhoods, yet their "market value" is negative: on a strictly cost basis, the food produced by agribusiness is cheaper on a kilocalorie/dollar basis than the food raised by community members in their garden. But this calculation is akin to reducing a human to a handful of ash and valuing that person at the market value of the calcium and other minerals in the ash.

Much of value in human life is beyond the market. Agribusiness would rather the State send money to people so they can sit at home "consuming" TV and media and then go out and buy highly profitable packaged food that sickens their bodies and spirits. That is the end result of an economy dominated by the State and cartels: a deeply and perniciously pathological society and economy.

Market forces in housing see the "solution" as wealthy Elites and corporations buying up all the housing and then renting it to recipients of State aid for high rents. Co-ops, co-housing and a host of other community housing solutions that radically lower the cost-basis of housing are rejected because they don't generate large profits. Their purpose is to lower the cost of housing while greatly enhancing its liveability and non-market value--"assets" that the market simply doesn't recognize unless they can be exploited for high profit margins.

This is why both the non-market forces of community and the market forces of efficiency and profit must share the economy if the cost basis is to be radically lowered. If people only make $10,000 in the market economy, the State's solution is to redistribute or print $30,000 so their consumption can equal that of people earning $40,000.

The solution I suggest is to radically lower the cost basis of the economy so those earning $10,000 can live simply and well on what they earn.

This solution does not compute for the Central State and its protected cartels, as they would lose their dominance over the economy. They have chosen the death-spiral for our future, and that's what we'll get until we restore some equilibrium between the State, the market and the non-market commmunity.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

Tuesday, May 29, 2012

The primary purpose of "safe havens" for "big money" is to preserve capital in realtively low-risk, highly liquid markets. There are few markets that offer both.

Experienced investors try to avoid the "confirmation bias" trap by asking what supports the other side of the trade.Confirmation bias is our instinct to find data to support our position once it is taken. To counter this bias, we must attempt to build a plausible case against our position. If the effort is sincere, we gain a fuller understanding of the market we are playing (or perhaps avoiding).

That the global economy is going to heck in a handbasket is self-evident. If you over-weight anecdotal "on the ground" evidence and fade the ginned-up official statistics, it is obvious the global slowdown is picking up speed in Europe and China, two of the world's largest "linchpin" economies. For example: China's once-hot economy is turning cold.

On the face of it, "growth"-related sectors such as commodities, stocks and high-risk bonds should decline across the globe as the recessionary reality sinks in, while relatively safe assets such as government bonds in Japan, Germany and the U.S. (the global economies perceived as more stable and thus less at risk) should see inflows.

And indeed, bond yields are falling as money flows into these safe-haven bonds.

Since "big money" tends to move markets, let's put ourselves in the shoes of someone tasked with managing $100 billion. If we understand the world's investment options from this point of view, we might gain some insight into the direction and dynamics of where "big money" will be flowing.

Our prime directive is not to make a lot of money with the $100 billion--it's to preserve this precious capital and keep it liquid so opportunities that arise can be exploited.

The traditional "safe havens" of gold and real estate have served the wealthy well for thousands of years, and they remain attractive capital-preservation safe havens. Moving capital out of inherently risky financial instruments into real assets is a time-honored risk-management strategy ("make it on Wall Street, bury it on Main Street"). We can discern this strategy at work in stories of Beverly Hills, Calif. houses drawing multiple bids for the first time in years and the long-term bull market in gold.

But gold and real estate have their downsides: first, they are relatively illiquid, that is, it's not that easy to "park" $10 billion in either sector and then sell it quickly to move the capital elsewhere. Second, each market has its own risks: the gold market is relatively small and volatile, and it's simply not big enough to move $100 billion in and out. Its role in risk management and capital preservation is important but limited.

Real estate is highly local, and its liquidity and return on investment subject to many dynamics. Various macro-conditions can turn a "hot" market into a cold one, and a "safe" investment can become dead-money or even a losing investment if rising property taxes eat away at the net return from rental income.

As an example of these limitations, Warren Buffett recently observed that he would buy thousands of single-family homes in the U.S. if it were possible to do so on a wholesale basis. Eevn if we discount this sentiment as propaganda aimed at supporting the housing market, it highlights real estate's fundamental limitations as a place to park $100 billion or more.

That leaves financial markets as a necessary part of any serious-money allocation. So where do you park $100 billion? The sums allocated to precious metals and real estate are limited by the conditions noted above, and that leaves a significant percentage to park in capital markets somewhere.

The choices are not unlimited. Europe and the euro: risky, for all the reasons we know; a quick "solution" is essentially impossible. You could wake up and find you've lost 20% just as a reflection of a weakening euro. China: anecdotally, money is leaving China as the boom is over, and all sorts of difficult-to-gauge risks are rearing up. Emerging markets: too small to be liquid, and despite the happy-talk about permanent developing-world booms, they're all linked to the markets in Europe, the U.S., China and Japan. (For example, the Indian rupee is in a free-fall against the U.S. dollar.)

That leaves Japan and the U.S. as the only available large, liquid markets. But Japan's basic dynamic is stagnation and malaise; corporate and government players there are questioning the entire Japan, Inc. model, as it is obviously failing to meet global challenges and spark a new era of growth. Japan's 20-year Keynesian "experiment" is an abysmal failure, having accomplished little while digging the nation a fiscal debt hole.

Even with these difficulties, Japan is perceived as a "safe haven" of stability, and that explains the relative strength of its currency, the yen.

In other words, there are visible limits on the stability of Japan and limited opportunities for growth in that economy.

That leaves the U.S., warts and all. Anyone responsible for $100 billion needs transparency, predictability and good intelligence to manage risk and return. For all its many problems, the U.S. offers relatively plentiful transparency, predictability and market data. Its equity, bond and currency markets are so vast that you can move $100 billion in and out with relative ease.

This "safe haven" status can be discerned in the strengthening U.S. dollar. Despite a central bank (The Federal Reserve) with an avowed goal of weakening the nation's currency (the U.S. dollar), the USD has been in an long-term uptrend for a year--a trend I have noted many times here, starting in April 2011.

That means a bet in the U.S. bond or stock market is a double bet, as these markets are denominated in U.S. dollars. Even if they go nowhere, the capital invested in them will gain purchasing power as the dollar strengthens.

All this suggests a "decoupling" of the U.S. bond and stock markets from the rest of the globe's markets. Put yourself in the shoes of someone responsible for safekeeping $100 billion and keeping much of it liquid in treacherous times, and ask yourself: where can you park this money where it won't blow up the market just from its size? What are the safest, most liquid markets out there?

The answer will very likely point the future direction of global markets.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

Sunday, May 27, 2012

Incentivize victimhood, fraudulent accounting of income/collateral and gaming the system, and guess what you get? A nation of liars and thieves.

Memorial Day is traditionally a day to speak of sacrifices made in combat.Like much of the rest of life in America, it has largely become artificial, a hurried "celebration" of frenzied Memorial Day marketing that is quickly forgotten the next day.

Instead of participating in this rote (and thus insincere) "thank you for your sacrifice" pantomime, perhaps we should ask what else has been sacrificed in America without our acknowledgement. Perhaps we should look at the sacrifices that need to be made but which are cast aside in our mad rush to secure "what we deserve."

The unvarnished reality is that most Americans have no idea what service members experienced in Iraq and Afghanistan, and they don't want to know. When 4,488 white crosses were erected on a hillside to remind us of all those who made the ultimate sacrifice in Iraq, people didn't like it, labeling it "unpatriotic."

That is not the real reason, of course; what is more patriotic than keeping those who served and sacrificed fresh in our awareness? One reason those 4,000 crosses make us uncomfortable is that they remind us of being conned by our civilian leadership into "wars of choice."

Another is that the reality of war and its long aftermath are not sufficiently "uplifting" for a brittle nation that prefers the distractions of "reality" TV to an acknowledgement of our problems and the sacrifices made and yet to be made.

Longtime readers know that one of my embedded concerns is the disconnect between the civilian populace and the U.S. Armed Forces. This disconnect starts with raw numbers:THANK YOU TO THE 0.45% of the population who served in the Global War on Terror (2001 to present).

Personnel are costly, not just in civilian life but in the Armed Forces, too, and so the Pentagon has "downsized" the Armed Forces to a smaller but more professional force. This reflects not just budgetary realities but the evolution of modern warfare.

But it's not just that fewer serve because fewer are needed; the number of civilians who want to know and want to acknowledge the experience of those who serve is dwindling everywhere, from Congress to the media to the living rooms of the nation.

The Pentagon has reinforced this disconnect by controlling media access and coverage of its wars, and the media has complied to "control costs" and "give the public what it wants." Survey the media "consumers" and you find few want more coverage of the war or its consequences. So the five dominant media corporations offer up more of what people say they want: faked circus-like "entertainment" in which carefully selected competititors vie for the highest "prize" in modern America, a moment in the media spotlight. The appetite for "news" that trumps up trivialities and senseless, sensationalist crimes is equally insatiable.

Propaganda and marketing are the dominant forces in America, along with a willingness to suspend reality to avoid whatever is complex, knotty, difficult or painful.

Is this what we've become, a nation so fearful of the truth that we shun it, avoid it, or paper it over at every turn? It would seem so.

To take but one Memorial-Day example, we now "outsource" war just as we outsource manufacturing, and we ignore the sacrifices of those who replaced enlisted Armed Forces--even when many are ex-service members: Contractor Deaths Exceed Military Ones in Iraq and Afghanistan (2010). At the peak of the Iraq War, 150,000 "contractors" were in-theater so our civilian "leadership" could claim to have reduced the "headcount" of military personnnel serving in Iraq.

As with everything else in America, the artifice was swallowed whole because the truth was too ugly and difficult for us to bear. The sacrifices of our contractors in Iraq have been ignored by everyone: the Pentagon, the politicians and the public. Nobody wants to acknowledge the losses of those we hired to replace "official" soldiers, even though many of those contractors were ex-U.S. Armed Forces service members.

In Welfare State America, exaggerating victimhood and negating family, community and integrity are all heavily rewarded: that's how you get the gamed disability and a host of other entitlements.

Since credentials and grades are trumpeted as the foundation of financial security, then cheating on schoolwork and exaggerating accomplishments have become accepted norms.

Incentivize victimhood, fraudulent accounting of income/collateral and gaming the system, and guess what you get? A nation of liars and thieves.

All of whom claim "I had no other choice."

That is a sickness that cannot be cured with a pill.

The excuses are legion and varied. Everybody else is cheating, too. Look at the crooks at the top. If I told the truth, I wouldn't get the job/mortgage/entitlement/degree etc.

Everyone is to blame except ourselves, of course; we are powerless. Yet we continue to elect politicians who tell us what we want to hear, lies that sooth our insecurities and fears, politicians who have doubled the national debt in a few years and indentured future generations so our precious share of the pie remains untouched.

Living within our means is now either "impossible" or a sin re-branded "austerity."So we borrow staggering sums every year to maintain the artifice that the contraption of lies, leverage and debt is sustainable, because we have become so brittle and diminished that we cannot bear the truth or our responsibility for the fetid trash-heap that is the national psyche.

We don't care if the nation spends the lifetime Medicare taxes of ten workers ($30,000 lifetime taxes paid, $300,000-$500,000 spent on each beneficiary) in the last few months or years of each elderly beneficiary's life, because 1) it's profitable for those at the trough and 2) we're powerless to change it.

But that's just another lie, stacked on the immense mountain of lies we have piled up in the past decade: we just want our ten lifetime-taxes paid because "we paid our share."

So never mind that we're borrowing the equivalent of the entire GDP of Germany every two years-- ($3 trillion)--and that's just Federal borrowing. Of course the true extent of Federal borrowing is cloaked and obfuscated with tricks such as "supplemental appropriations," so the "headline number" is just another untruth passed off as fact--just like the unemployment rate and the GDP itself.

Add in private debt and local-government bond issuance (often for projects that were once paid for out of general fund tax revenues) and we're borrowing more like the GDP of Germany and France every two years, with no other future in sight.

The word "sacrifice" has been sacrificed on the altar of expediency. The politicians we elect (those who dare speak the truth of our impoverishment and complicity don't get elected--we abhor and fear the truth) have ground the word "sacrifice" into meaningless with overuse; it now means nothing but yet another clarion-call to swallow lies and artifice to protect our share of the loot.

The government can't be the problem, because the government issues me a nice check every month.

And so we cling to easy falsehoods. If only the 1% paid their fair share, all our problems would be solved.

The 1% should pay their fair share, but that isn't the problem; the top 1% already pay a significant share of income taxes collected; doubling that amount changes nothing about the long-term insolvency of our entitlements and crony-capitalist Empire.

The problem is our consumerist, Central-State dominated society/economy that depends on ever-rising debt and and leverage is unsustainable, and placating ourselves with expedient simplicities that shift the accountability and responsibility from ourselves to someone or something else solves nothing.

This reliance on excuses, denial and expediency is the hallmark of adolescence; in adulthood, these are the hallmarks of failure and pathology.

Is this what we've become, brittle, simulacra "grown-ups" who are incapable of acknowledging the truth of our situation? If we cannot dare acknowledging reality, then how can we solve our problems? If we cannot bear an awareness of our systemic rot and unsustainability, then how can we move past denial and expediency?

If we have lost the ability to live within our means and to acknowledge difficult facts, then we have lost everything: our national integrity, our ability to problem-solve, our vigor and our future.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

Thank you, David P. ($50), for your superbly generous contribution to this site--I am greatly honored by your support and readership.

Saturday, May 26, 2012

Ross's mind was a feverish whirl of evil intentions, for GreenDollGal had summarily rejected his polite emailed offer to buy the T-20Z toaster at a handsome premium to her winning bid. With hope broken and rationality pummeled into bitter surrender, Ross had tumbled to the sulfurous depths only those in despair know.

As crazed as it may have sounded to a less obsessed individual, breaking and entering GreenDollGal's house, wherever that might be, to purloin the T-20Z toaster seemed to sprout the dark wings of logic and indeed, of inevitability. In his spinning-top intensity, Ross calculated the risks and the contingencies; if he couldn't find the T-20Z, then he'd grab an armful of her treasured 19th century dolls as hostage. With her precious dolls in his grasp, GreenDollGal would be brought swiftly to her knees; he might even demand her entire appliance collection. And don't think distance will protect your collection, Ross thought with grim determination; Duluth, Charleston, Mobile, heck, even Fairbanks—I need that toaster. Rising from his deep-in-thought slouch, Ross leaped from his cat-shredded office chair with an energy few living souls had ever witnessed and trotted across the hall to knock insistently on Kylie's door. For a plan had burst into fullness in his overheated mind: recruit Kylie to negotiate for the T-20Z with GreenDollGal, and through the negotiation, discover the location of GreenDollGal's abode. If the negotiation succeeded, so much the better; and if it did not, then burglary would deliver the T-20Z or the doll hostages. His comely neighbor managed to cool his fevered plans by heating his animal spirits, for she came to the door post-bath, wrapped in a white towel which set off her brown skin most alluringly. Her damp curling hair dangled around her perfectly oval face, and her lips were parted most wonderfully in surprise at his unusual insistence. Tearing his gaze from her bare shoulders, he asked, "What size shoe do you wear?" Pulling the towel self-consciously higher over her bustline, Kylie met his flustered gaze with a curious guardedness. "I'm not sure we know each other well enough for that." "Oh, sweet Hallelujah, I didn't ask for your bra size, I just want to know if you wear a size 7 shoe." Kylie sucked her lips in a thoughtful pause, and Ross had to remind himself that she played in a league far above his own: beautiful, smart and self-effacing women like Kylie flicked hopeful guys off like dead gnats. "Why do you want to know?" she asked. Frustrated that a simple question had turned into a mini-Inquisition, Ross mustered a stripped-down response. "You know that toaster I lost on eBay? The woman who won has lots of shoes for sale. I need you to buy a pair from her." "But why?" Wary of revealing his sordidly repellent burglary scheme, Ross fumbled for an appealing explanation. "I need to open a line of communication with her," he replied. Kylie's expression darkened with annoyance. "Why involve me? Just offer her more money for the dumb toaster." "I did, but she turned me down. But maybe she'd strike a bargain with another woman." Kylie twirled a damp strand of dark hair around her index finger and despite his lower-league status, Ross's body jerked in instinctive reaction to her flirtatious gesture. "I'd pay for the shoes, of course," he said, and added in a pleading tone, "Please, Kylie, as a favor. I really need your help on this." Abject begging seemed to reach his absurdly gorgeous neighbor, and she nodded. "I could always use another pair of shoes." "Your intimate secret—size 7—is safe with me," he replied in a conspiratorial voice. "If we're lucky, she lives nearby and you can pick up the T-20Z tomorrow." "I know you're crazy about toasters, but what's the rush?" "The show," Ross blurted heatedly. "Las Vegas. My future. I have to submit photos of my collection in two days or I'm doomed." Kylie's expression fell into a pout which was even more adorable than her smile. "But why me?" "You're a woman," Ross replied quickly, "and the whole idea is for you to negotiate for me. Two, I trust you, and three, you have lots of free time." "So do you," she rejoined, and he said, "Which brings me to point four. I already hate this woman with every fiber of my being, and she's clairvoyant. She's already sensed my hatred and refused to deal with me." "Clairvoyant," Kylie snorted. "Right. Then just go buy another T-30X." "T-20Z," he corrected her. "They're stupendously rare and I'm out of time. I checked with dealers, there's none available at any price." Kylie shook her head in a show of frustrated pity. "So you lost an auction. Don't blow it up into a tragedy." "Not getting in the show would be a tragedy," Ross said insistently. "Look, she outbid me by eleven cents the first time and by two cents the second time. Either she read my mind—telepathy—or she foresaw my final bid—clairvoyance. And now she detects my need for the T-20Z and is refusing me because I hate her." "How can you hate someone you've never met?" "If she's wantonly obliterating your most treasured dream, then you don't need to meet her," Ross said, and the grim tone of his voice startled Kylie. "Maybe she's planning to go to Vegas, too." "You know, I believe in women's intuition," Ross said. "You're probably right." Kylie raised her arms to swirl her hair atop her head and Ross struggled not to swoon too visibly, for her slender brown arms, long bare legs and luxurious damp hair were mesmerizing; the small white towel was stretched to the extreme to cover both her derriere and bust, and Ross's eyes were drawn irresistibly from her damp dark hair to her cleavage and thence to her shapely calves. With a supreme effort, Ross focused on her large brown eyes, and felt his inner man melt like sun-drenched Jell-O. My God, this is torture, he mused; please say yes, but not too soon. "I don't know," Kylie said dubiously. "It's an awful lot of trouble for a dumb toaster." "Are you kidding? It's ten minutes work. And you'll get a free pair of shoes—hey, make it two pair. That's worth at least $60." "Only ten minutes?" Ross put on his most imploring expression and nodded. "Just look at her shoe collection, email her an offer and then buy a pair." "You said two pair." "Yes," Ross agreed with a sigh. "Two. You have an eBay account, don't you?" While she held her hair aloft, the white towel suddenly came undone and dropped noiselessly to the floor. Despite the speed of Kylie's recovery, some of her charms had been briefly laid bare for Ross's stunned viewing and a warm flush rose over her face as she snatched the towel to her chest. Swallowing hard, Ross stammered, "So you have an eBay account, right?" Kylie nodded assent, and as she struggled to re-wrap the towel around her midriff Ross worked up a faux-calm voice. "I'll send you the link. Just log in, look at her shoes and email her about the shoes." Still flushed with embarrassment, Kylie nodded and began to close her door. When the door was a few inches from closure, she paused and murmured, "32-C." Edging up to the crack, Ross asked, "What?" Kylie's oval face filled the opening, and she looked down. "My bra size," she said shyly. "32-C. Since you know my shoe size, you might as well have that, too." Taken aback, Ross whispered, "I'm honored," and Kylie closed the door. Ross exhaled with rough vigor and focused his bedazzled attention on the devious, nay, even devilish, Plan B which had unfurled its dark wings in his mind as he'd awaited Kylie's grudging acquiescence. Now that Plan A—the apparently innocent inquiry by Kylie—was launched, Ross returned to his desk to launch Plan B—the acquisition of whatever GreenDollGal was currently bidding on. For his initial thievery fever had, on reflection, been chilled by the harsh realities of transforming a pudgy, utterly lacking in criminal experience white-collar drone—i.e. himself—into a stealthily fearless burglar. His wild scheme to grab her dolls as hostages led to a realization that holding something she valued hostage should be his plan from the start. But rather than break in and purloin GreenDollGal's existing treasures—a crime, he reminded himself, no matter how justified by circumstance— far better to snatch away a desired treasure via eBay sniping. This required considerable sleuthing and analysis of GreenGalDoll's past and current bids. The first rule of collecting, Ross knew, was the most expensive items pointed unerringly to the collector's most prized possessions. From this corollary Ross quickly concluded GreenDollGal's obsession with shoes was mere frippery, while her collection of dolls and old movie posters were centered deep in her heart. But she hadn't bid on dolls in months; all her recent activity had been in vintage appliances and film posters. And while he could not yet discern a pattern in her poster bids, it was clear that film posters were being sought for an important collection. That was knowledge enough to launch Plan B, and Ross set to work researching the value of her current goal, a poster for the 1940s film The Thief of Bagdad. A number of bidders had already entered the auction—given their own auction histories, several were quite experienced—and Ross anticipated the bidding would be spirited. As a non-expert, he knew he would be overpaying unless he set a bid which automatically raised the last bid by a dime up to a pre-set limit; but at what limit? It had to be high enough to win; and with that thought grimly in mind, Ross opened a new web window and transferred the last of his savings to his PayPal account. This was for the money, Honey, he told himself with renewed resolve; he would get The Thief of Bagdad poster and with that leverage, pry GreenDollGal's undeserving fingers from the T-20Z in time to win glory in Las Vegas.

Friday, May 25, 2012

The mainstream media has always loved controversy and wars, military and cultural alike. Now we have an "Argument Industry" that thrives on keeping problems insoluble.

That much of the "news" is artifice and propaganda is a given.How can a society make good decisions about its future when the "facts" such as the unemployment rate are massaged and manipulated, and so many of the "reforms" are simulacra designed by the very wolves supposedly being tamed? Answer: it can't.

The same question can be asked of a society in which the "editorial" side of the mainstream media is dominated by an "Argument Industry" that pours gasoline on every conflict and avoids solutions like a vampire avoids the Cross and garlic.

Finding solutions would decimate the "Argument Industry" and slash profits.

That leaves us with the same question: How can a society make good decisions about its future when every challenge is conflated into extremes that cannot abide compromise or even recognize "outside the box" solutions? Answer: it can't.

Correspondent Kevin F. coined the term "Argument Industry" in this incisive commentary:

While pondering the gay marriage vote in North Carolina, I thought of how that is one among many issues we could solve once and for all in this country, but somehow we've decided not to. I wonder how much of the resistance to solutions* is caused (intentionally or subliminally) by the need for an "Argument Industry". For any hot-button issue, there is an ecosystem of lawyers, pundits, bloggers, journalists, lobbyists, community organizers, protesters and many others who feed off the issue. Each argument provides steady work for hundreds, if not thousands, of people, mainly in fields (political science, TV news, etc.) that would founder or collapse if the arguments didn't exist. Without gay marriage and abortion, half of all talking heads would be out of work.

It seems to me that the Argument Industry is one of the many consequences of the global shortage of legitimate work, a large pocket of the "make work" you described earlier this month. Conveniently, it also stirs people's passions, and drives them to rally around the politicians that argue the same way they do, encouraging loyalty in the system and the Status Quo.

* For "gay marriage", why not abolish the concept of marriage within government? Replace it with a "civil partnership" for everyone: you may select anyone as your partner, provided they are over 18 and also select you as their partner. Partners get all the rights previously afforded to holders of "marriage licenses", and all marriage licenses are converted to partnerships. Your religion (if any) may limit who you can marry (and pressure you to not make certain choices of partners), or limit when you can call yourself "married" (only after completing a special ceremony), but it's not the government's problem. Marriage wouldn't exist in the eyes of the government, only the concept that many people choose a partner and want them to have special rights and privileges.

Thank you, Kevin, for an insightful explication of the Argument Industry. It could be argued (heh) that I am part of the Industry that profits from maintaining ideological and cultural deadlocks and dead-ends, but my view is that adaptation requires transparent experimentation and dissent, in which the "better" ideas (i.e. the ideas that work better in the real world than the alternatives) out-compete the failed ideas of the past.

I see this blog and my books as efforts to honestly contextualize our situation and sketch out a practical framework for moving ahead.

For example, the various special interests and protected fiefdoms in financially troubled Vallejo, California, claimed without any shred of compromise or reason that bankruptcy would destroy the city, etc. They were flat-out wrong.

The number of neighborhood watch groups jumped from 15 to 350. Citizen volunteers came together monthly to paint over graffiti and do other cleanup work. And the city council struck an unusual deal with residents — if they agreed to a one-penny sales tax increase, projected to generate an additional $9.5 million in revenue, they could vote on how the money would be used. The experiment in participatory budgeting, which began in April, is the first in a North American city.

Solutions exist, but neither the vested interests profiting from the failed Status Quo nor the Argument Industry can abide practical solutions, because such solutions destroy both "profit centers."

Now that Vallejo is leading the way, it's dropped out of the news for the most part; this MSM article is a rare bit of solid reporting. Once the conflict and trauma could no longer be fanned by the Argument Industry, coverage evaporated.

One of the key take-aways is that solutions are local, not national. The Argument Industry loves to keep gay marriage front and center in a "national debate," where I see the solution is to let the issue be decided on a county level. People will move to counties that align with their own views, rather than have a "solution" shoved down their throats.

The same can be said of "drug wars," healthcare, etc.: solutions sought at the national level are already doomed by the bureaucratic costs and political corruption in Washington. Devolve the problems to the local level and let a thousand flowers of experimentation bloom. Those that work will quickly stand out and be copied by others seeking real solutions rather than clinging to a failed Status Quo.

Kevin offers an interesting solution to the heavily hyped "gay marriage" controversy. It's worth recalling that in rural Colonial America the government also had no role in controlling or officiating marriage. In rural America, churches and preachers were scarce, with many communities served by itinerant clergy.

To get married, a couple declared their marriage "in the eyes of God" and moved in together. When the preacher came round, they might, if they and their families chose to, conduct a church ceremony. If not, the marriage stood as declared and consummated. The local government (such as it was) might record the marriage as a census factoid much like ownership of a specific parcel of land, but it did not regulate what lay outside the boundaries of State control.

In Peak Government, the Central State seeks to control everything; there is nothing that is not within its purview and grasp. Perhaps that in itself is the "problem" that needs fixing.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution, and it combines cultural, technological, financial and political elements in a dynamic flux.History is not fixed; it is in our hands. We cannot await a remote future transition to transform our lives. Revolution begins with our internal understanding and reaches fruition in our coherently directed daily actions in the lived-in world.

Thank you, Edward P. ($25), for yet another splendidly generous contribution to this site--I am greatly honored by your continuing support and readership.

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